Mobile price wars should delay demand for VoIP on cellphones

February 20, 2008 5:50 PMMG Siegler

We’re entering a mobile service price war. Number three U.S. mobile service provider Sprint plans to offer unlimited minute price plans as low as $60 a month to trump the $99-a-month unlimited minute price plan announcements yesterday by its larger rivals Verizon and AT&T.

While this is great news for consumers who have long been held captive by expensive mobile price plans and outrageous overage charges, this could also be good news for the mobile industry itself whether they realize it or not.

You see, the trend in the industry is shifting away from the more traditional, simple handsets, and towards Internet-enabled mobile computing devices. With many of the companies now offering unlimited data plans for devices such as the Blackberry, it was really only a matter of time before people started to realize that it would be cheaper to talk over the Internet via technologies such as VoIP.

Sure, there hasn’t yet been an influx of VoIP applications on devices such as the iPhone, but companies are at work to bring that technology to such devices. Even if the mobile companies were successful in blocking such applications from being installed on phones, soon enough people would find ways to use them via the web browsers on their phones or instant messaging applications.

Don’t forget that many cellphones are now coming with WiFi built-in that could circumnavigate the cellular companies altogether as well.

Skype recently announced that it had connected 100 billion Skype-to-Skype calls over the Internet. It is only a matter of time before people start to use the Internet on their phones in the same way. Skype knows this, which is why it has introduced products like the Skypephone.

Skype also just announced a new peak two days ago of 12 million concurrent users online – and is growing fast.

This price war should satisfy customers enough for the time being, but who knows what kind of applications we’ll see when the first Google Android-enabled phones start hitting the market later this year as well as when the iPhone SDK hits later this month (our coverage). Incidentally, these were likely two of the main factors that led to the price war in the first place.